Abstract:

This report outlines the alternative corporate
structures which could be applicable to a beet ethanol
industry in New Zealand. It is apparent that both the
Rural Banking and Finance Corporation and the Development
Finance Corporation will play major roles in the development
of this industry, both in provision of debt capital and in
assisting farmers build up their own equity shareholding in
the processing company. With careful preparation it should
be possible for farmers, if they so wish, to become closely
involved with the development of this new industry, not only
as feedstock suppliers but also by participating in the
capital structure and management of the processing and
product distribution operations.
Section 4 of this report clearly identifies the
tax advantages that can accrue from any farmer involvement
being organised on a cooperative basis. Since the actual
activities of a beet ethanol plant may be outside the scope
of the current definitions contained in the relevant Acts,
un approach to the Commissioner of Inland Revenue for clarification
on these matters will be necessary. In addition,
legal interpretation of the tax situation relating to a
farmer cooperative which owns only part of the total equity
in the processing company is necessary. There is no doubt,
however, that with careful management farmers will be able to participate in and benefit from all aspects of any agro industrial
system which emerges to produce ethanol from beet
in New Zealand.[Show full abstract]